Amendments in regards to the rental market.

Today, we will focus on what is always a hot-button issue in community associations, amendments regarding rentals.
There is probably no topic that generates more dispute during amendments. There are a number of reasons for this.First, developers rarely put meaningful rental restrictions in their documents. Understandably, they want to attract the largest pool of potential purchasers, including investor owners who buy units as a rental property, as well as working age out-of-staters who often buy Florida properties with an eye toward rental now, and retirement later.
On the other side of the coin, renters are considered by many associations to be more likely to have loud parties, damage common property or think that the rules do not apply to them. Most of us have been renters at some time in our lives, and it might be argued that people who are bad tenants are just as likely to be bad owners, regardless of whether their name is on a deed or a lease.In any case, it is clear that rentals do have some effect on property values, to the extent that mortgage financing is difficult to obtain in communities with a high percentage of rentals.
Therefore, it is no surprise that a prime area of focus in updating governing documents is to address the rental clause in the declaration of condominium, or declaration of covenants. The following are typical areas of concern:• Duration and frequency of permitted rentals: Associations which permit rentals of less than 30 days, more than three times per year, fall under Florida's hotel laws, and are also likely required to comply with the Americans With Disabilities Act. Many associations which consider their communities residentially oriented do not like the "revolving door" affiliated with short-term tenants, while resort properties expect heavy traffic. The establishment of minimum lease terms, as well as the frequency of permitted leases (such as the number of times per year a property can be rented) is a frequent amendment topic.
• Prior approval of leases: Many residential communities engage in some level of "screening" of potential renters, which typically involves a pre-occupancy application, a background check, and an approval process. If an association is going to have the authority to approve tenants, the documents should set forth grounds for disapproval. In my opinion, a tenant's credit history is of little interest to an association, while criminal history may be of great concern.• Transfer fees: If an association is going to approve tenants, it should be entitled to reasonable compensation for the time and effort involved in the process. The condominium law permits tenant application fees of up to $100 per application, but the authority for the fee must be set forth in the documents. There is no counterpart in the law for homeowner's associations, although those HOAs that do engage in review of rental applications also typically charge a reasonable administrative processing fee.• Security deposits: One common complaint about tenants is damage they cause to common areas, particularly when moving in and moving out. The condominium law allows an association to charge tenants a security deposit equal to one month's rent. The authority for the charge must be set forth in the documents. Like the application fee, there is no guidance in the statute for HOAs about security deposits, although I am aware of no reason why a similar deposit could not be authorized through a homeowners' association document.
• Dealing with bad tenants: One of the most frustrating situations faced by associations is when the problem of a bad tenant is exacerbated by an uncooperative unit owner. A well drawn set of documents will give the association some "teeth" in dealing with tenant problems, including the ability to initiate eviction proceedings on behalf of the owner, if the owner does not take timely and appropriate steps to address tenant problems. This can be very helpful in persuading owners to nip tenant problems in the bud.• Fining: Both the laws for condominiums and homeowners' associations permit the levy of fines directly against tenants. However, the authority for the fine must be contained in the governing documents.